January 19: Andrew Carter: Party must back up promises on devolution for sake of cities

If all goes well, Leeds, Sheffield and surrounding cities could play a leading role in turning the hype about a “Northern Powerhouse” into reality. But to achieve it, they will need much more control over the drivers of economic growth – including transport, planning, skills and housing – and greater powers to raise revenues.

The scale of the task is laid bare in the Centre for Cities’ annual Cities Outlook, a health-check of the performance of the UK’s 64 cities. This year’s report covers their fortunes over a decade of economic boom and bust, during which three major parties have held power.

It finds that the gap between Britain’s best and worst-performing cities has widened dramatically since 2004, creating a two-tier economy. For every 12 net new jobs created between 2004 and 2013 in cities in the south of England, only one was created in cities throughout the rest of Britain.

For Yorkshire’s cities, there have been successes and set-backs during this time.

York and Leeds are Yorkshire’s clearest shining lights, having experienced business growth above the UK average – 16 per cent in York and 17 per cent in Leeds – and come through the recession without any net loss of jobs. They have demonstrated resilience, with strong records in high-level qualifications, supported by their universities.

Leeds, in particular, has a strong ratio of private to public sector jobs, indicating the strength of its private sector and reflecting the growth of its professional and financial services sector in response to a decline in manufacturing industries.

On the other hand, Huddersfield, Bradford, Sheffield and Doncaster have all experienced net losses in their number of jobs over the past decade.

In Hull, almost 10 per cent of its jobs have been lost. While there are hopes that being chosen as 2017 UK City of Culture, coupled with projects such as a Centre for Digital Innovation and Siemens’ £160m investment in wind turbine production could boost the city’s fortunes, there is no denying that the trajectory so far has been in the wrong direction.

These numbers are stark facts which validate the recent political interest in strengthening the economic performance of the UK’s cities – and underscore why change will need to take place under the next Government.

The past year has seen Chancellor George Osborne pledge his commitment to a “Northern Powerhouse”, linking the major cities of the North together with better transport connections, and two of the big cities of Yorkshire have joined Manchester in negotiations for devolution packages.

Council leaders, however, accuse the Government of giving with one hand and taking away with the other, given the renewed interest in devolution has coincided with grant and welfare cuts that have hit the North of England harder than the South.

So too must it be noted that the devolution agreement with Sheffield is substantially narrower than that agreed with Greater Manchester, and as it stands, the Leeds deal is still no closer to fruition.

For their parts, Labour has promised that an electoral victory would see them boost decentralised funding to the tune of £30bn over five years, while the Liberal Democrats have proposed “devolution on demand” for cities.

While it is most welcome to see figures at the highest level of politics recognising that something must be done to reverse the unfavourable trends we see in Cities Outlook, we once again find ourselves at risk of returning to the status quo ahead of the election.

Despite the good intentions of successive governments, the fact is that the UK remains the most centralised nation in the developed world. The policies and funding programmes that have been put in place over the past decade have been consistently too small, ad hoc, complicated and costly for cities to implement.

If nothing changes, we could be looking at ahead to a decade in which the chasm between our cities continues to stretch, irreversibly.

It is now time to go beyond tinkering at the edges.

More devolution deals need to be agreed with other city-regions so they can forge policies to suit their needs. Cities also require a greater ability to raise and retain revenues locally, such as through devolving property taxes, so they can focus resources and investment to support their local economy.

The parties must back their devolution promises with a determination to unleash the potential of cities and improve the quality of life throughout the UK.

Andrew Carter is the acting CEO of urban policy research unit Centre for Cities